TLDR: Chris Hipkins signalled in his first week as PM he was open to loosening migration settings and would ‘rein in’ unnecessary Government spending to focus on ‘bread and butter’ cost-of-living issues once he picks his full Cabinet next week.
Also in our political economy, the global economy and geo-politics this week:
* December quarter inflation was softer than the Reserve Bank (Te Pūtea Matua) expected so some economists and most traders dialled down their expectations for the bank’s next rate hike on February 22 to just 50 basis points from 75 basis points;
* Signs of a soft landing with slower inflation emerged in the European and US economies, leading traders to lower wholesale interest rates in the hope the US Federal Reserve and the European Central Bank ease back on their inflation-fighting rate hikes;
* Germany agreed to release its own and other European nations’ Leopard II tanks for Ukrainians to fight Russian troops with, as long as America sent some of its own Abrams tanks;
* The scientists running the Doomsday clock moved its hands 10 seconds down to be 90 seconds from the ‘midnight’ of a global nuclear, climate and/or pandemic catastrophe, which was the closest to the end time since it was created in 1947; and,
* MetService reported this morning Auckland had its wettest day ever yesterday, with Auckland Airport flooding and being closed until midday today after 249mm fell in a single day, which was 54% more than fell in the previous wettest day of 161.8mm on Feb 16, 1985. More rain fell on the Airport in an hour than would normally fall in a month. January will be Auckland’s wettest month ever after Aotearoa recorded its hottest year ever. Mayor Wayne Brown eventually declared an emergency. We hope all our subscribers are safe and well.
In the podcast above of our weekly ‘hoon’ webinar for paying subscribers last night at 5pm, co-hosts Bernard Hickey and Peter Bale talk to special guests Foreign Affairs Professor Robert Patman from the University of Otago, ANZ economist Finn Robinson and University of Auckland Associate Professor Susan St John about:
* Chris Hipkins’ first week as PM;
* Grant Robertson’s decision to go list-only;
* Germany’s decision to release its Leopard II tanks for Ukraine to use;
* Softer-than-forecast domestic inflation data and what it means for the Official Cash Rate decision due on Feb 22;
* the likely slowdown in the US Federal Reserve’s rate hike this coming Thursday;
* the Government’s long-stalled Working For Families review; and,
* how the various welfare payment settings punish those with young families for earning extra money much more than pensioners are punished for earning more.
The Chart Pack of the Week
Lower - Global shipping container costs fell to pre-pandemic levels. Visual Capitalist
Slower - Quarterly NZ non-tradable inflation fell to 1.5% in the December quarter from 2% in the September quarter. Stats NZ
Softer - US GDP growth slowed to an annual rate of 2.9% in the December quarter from 3.2% in the September quarter, which was better than expected. US Bureau of Economic Analysis data.
Better - Business pricing intentions as measured in ANZ’s monthly business confidence survey bounced in January, but are off their highs.
Data Points of the Week
US$25.461 trillion - US GDP in nominal terms in 2022, up 21% from 2020 and up 8.2% from 2021. Real US GDP rose just 1.0% in 2022 from 2021. US BEA
29.3% - The rise in New Zealand’s domestic air travel prices in the December quarter from the same quarter a year ago. International air travel prices rose 11.6% in the quarter from a year ago. Stats NZ.
Some wild things
Ka kite ano
Bernard
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